TCS's 12,000 job cuts spark fears of larger IT layoffs

BENGALURU: TCS laying off over 12,000 mid- and senior-level employees has sent shockwaves across the tech industry. This move not just challenges the perception of TCS as a company known for job security and stability, but shows that India's IT sector is in the early stages of a significant reset.

The industry is undergoing a structural shift, mirroring global trends where major tech firms are streamlining resources, improving cost efficiency, reallocating assets, and shutting down divisions that no longer align with strategic priorities.Margin Pressures: Industry experts attribute this transformation to mounting margin pressures, prompting companies to control costs by reducing headcount. Many believe that AI is disrupting the traditional workforce pyramid, replacing broad-based hiring models with leaner, more specialised structures which yield higher billing.

As a result, the future of services will rely heavily on a blend of newer tech and human ingenuity, where billability is determined by the premium clients are willing to pay for niche skills rather than volume of resources.

Bench Policy: TCS has said its restructuring efforts are aimed at making the company future-ready. As part of this initiative, sources told TOI the company has begun focusing on employees who have remained unbilled - commonly referred to as being on the "bench" - for extended periods, typically ranging from 3 to 18 months.

These individuals, many of whom have between 3 and 10 years of experience with the firm, are being either relocated or let go.

This has sparked concerns within the industry over the potential for a wave of sudden and unexpected exits.Sudden Exits: Several employees who spoke to TOI on condition of anonymity said those impacted had been on the bench for anywhere between 3 and 18 months. In one case, an employee claimed she was called into a meeting where three HR representatives handed her a "discharge letter" and asked her to resign.

"It was sudden and shocking. There was no prior intimation," she said. TCS, however, maintains that it has consistently offered relocation and retraining options to benched employees to enhance their chances of being deployed on projects.Meanwhile, lateral hires awaiting onboarding have reported uncertainty. In response to one such candidate, a TCS HR executive reportedly said, "Do not wait for TCS. New announcements are going on.

We are helpless," suggesting that onboarding timelines are unclear amid ongoing changes.Campus Chaos: Indian campuses are facing a stark dichotomy - freshers without job offers on one side, and large salary packages on the other. The recent layoffs at TCS have sounded an alarm across the industry. Global capability centres (GCCs) continue to lead recruitment efforts as Indian IT companies adapt to a major transformation in the tech landscape.Even as upskilling becomes part of everyday work life, lower net additions are making engineering graduates anxious.

Indian campuses today present a stark contrast: while some students receive lucrative offers, many others are left without any. For computer science students, the future is deeply intertwined with AI, offering exciting opportunities but also demanding rapid adaptation.Ramkumar Ramamoorthy, partner at tech growth advisory firm Catalincs, said, "In the context of digital and AI, there is a crying need for India to reimagine its higher education to stay relevant. Beyond STEM programmes, we must integrate AI across disciplines - liberal arts, law, medicine, management, and social sciences. The only way to do this at scale is through collaboration with experts and practitioners. Otherwise, we risk producing graduates who are misaligned with market needs, potentially leading to serious social implications.

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